Lash v. United States, 4894.

• Decision Date: 02 May 1955
• Docket Number: No. 4894.,4894.
• Citation: 221 F.2d 237
• Parties: Max P. LASH, Defendant, Appellant, v. UNITED STATES of America, Appellee.
• Court: U.S. Court of Appeals — First Circuit

221 F.2d 237 (1955)

Max P. LASH, Defendant, Appellant, v. UNITED STATES of America, Appellee.

No. 4894.

United States Court of Appeals, First Circuit.

April 7, 1955.

Rehearing Denied May 2, 1955.

Joseph N. Welch, Boston, Mass., with whom Anthony Brayton, John E. Laursen, and Hale & Dorr, Boston, Mass., were on brief, for appellant.

Charles F. Choate, Asst. U. S. Atty., Boston, Mass., with whom Anthony Julian, U. S. Atty., Boston, Mass., was on brief, for appellee.

Before MAGRUDER, Chief Judge, and WOODBURY and HARTIGAN, Circuit Judges.

WOODBURY, Circuit Judge.

A jury in the court below found the defendant-appellant guilty as charged in all three counts of an indictment alleging evasion of income taxes in violation of § 145(b) of the Internal Revenue Code, Title 26 U.S.C. § 145(b),¹ and the court imposed a sentence of imprisonment on each count, the sentences to be served concurrently. On this appeal from the judgment of sentence we are concerned with assertions of error on the part of the District Court in the charge as given and in the failure to charge as requested, in rulings on the admission and exclusion of evidence, in questioning a juror in chambers in the absence of the defendant and in subsequently denying a motion for mistrial based thereon, in permitting a portion of the argument of government's counsel to stand without cautioning the jury to pay no attention to it, and in denying a motion for judgment of acquittal. Not all of the assertions of error are of sufficient substance to warrant discussion. We shall therefore state only the facts necessary for consideration of the matters which we think call for comment.

In the first count of the indictment it is alleged that the defendant, as the treasurer of a corporation named Bristol Fabrics, Inc., willfully and knowingly attempted to defeat and evade the corporation's income tax in an amount stated by filing and causing to be filed on its behalf a false and fraudulent return for its fiscal year ending November 30, 1946. In the second and third counts it is alleged that the defendant willfully and knowingly attempted to defeat and evade his personal income taxes in stated amounts for the calendar years 1946 and 1947, respectively, by filing false and fraudulent returns for those years.

The government's general theory throughout the trial and on this appeal is that the defendant caused Bristol to pay purely personal expenses of his own and of his immediate family, and later to deduct those payments as its business expenses, thereby understating the corporation's net income by the amount of those deductions, and that the payment of those expenses by Bristol constituted additional income to the defendant which he failed to report in his personal returns.

There can be no doubt that the defendant caused some items of his and his family's purely personal expenses to be paid by Bristol and deducted by it as expenses of its business. Indeed, the defendant admits as much as to a few relatively minor items. But there is evidence from which the jury could well have found that the items so paid and deducted by Bristol were not few in number and insignificant in amount, but, on the contrary, were numerous and amounted in gross to several thousand dollars. And from this the jury would be warranted in drawing the inference urged on it by the government that the corporation did not deduct those items because of inadvertence or mistake, as the defendant contended, but that the defendant, as president, treasurer, principal managing officer, and majority stockholder of the corporation knowingly and willfully caused it to take those deductions in an attempt to defeat or evade a substantial part of its income tax for the year involved. Furthermore, there is nothing in Bristol's books to show that it was ever reimbursed by the defendant for the items of his and his family's personal expenses which it paid, or that it listed an account receivable against him in the amount of those expenses, and it appears from the defendant's tax returns that the only amount he reported as received from Bristol was his salary. From the foregoing it is clear that the court below did not err in denying the defendant's motion for judgment of acquittal on all three counts.

We therefore turn now to matters which at the most would entitle the defendant to a new trial.

The principal complaint leveled by the defendant at the charge is with respect to the instructions given to the jury on the issue of willfulness. He says that willfulness is an essential element of the crime with which he was charged and a key issue in the case, and that the court's instructions on the issue were both unclear and inaccurate to his serious prejudice. His trial counsel, however, did not object to the portion of the charge dealing with the issue of willfulness in accordance with Rule 30 of the Federal Rules of Criminal Procedure, 18 U.S.C., wherein it is provided: "No party may assign as error any portion of the charge or omission therefrom unless he objects thereto before the jury retires to consider its verdict, stating distinctly the matter to which he objects and the grounds of his objection." Nevertheless, the defendant urges that we consider his assertion of error under the established principle of appellate practice, see Screws v. United States, 1945, 325 U.S. 91, 107, 65 S.Ct. 1031, 89 L.Ed. 1495, embodied in Rule 52(b) of the Federal Rules of Criminal Procedure which reads: "Plain errors or defects affecting substantial rights may be noticed although they were not brought to the attention of the court."

The two Rules quoted above impinge upon one another but do not actually conflict. The Rule requiring objection to the charge before the jury retires is a salutary one in that it affords an opportunity for the prompt correction of inadvertent misstatements, oversights, omissions, or even erroneous statements of law, which if not corrected at the time would necessitate a new trial after an appeal with consequent delay and expense to the defendant and to the public. Furthermore, the Rule prevents a defendant from sitting silently by when he is aware of an error in the charge perhaps more technical than seriously prejudicial, which could and undoubtedly would be corrected on the spot if brought to the court's attention, to the end that in the event of an adverse verdict, he would have good grounds for a new trial with the chance of a favorable verdict from another jury. On the other hand, should the Rule be rigidly applied, appellate courts would be powerless to correct grave miscarriages of justice resulting from serious errors in the charge whenever a defendant or his counsel through ignorance, inadvertence, or inexperience failed to object before the jury retired to consider its verdict. Therefore, appellate courts will take notice of errors asserted by counsel for the first time on appeal, and also notice errors sua sponte, when in their discretion notice of the error is necessary to prevent an injustice. The guiding principle with respect to spontaneous notice of errors, which also applies to notice of assertions of error made by counsel for the first time on appeal, was clearly and succinctly stated in United States v. Atkinson, 1936, 297 U.S. 157, 160, 56 S.Ct. 391, 392, 80 L.Ed. 555 as follows: "In exceptional circumstances, especially in criminal cases, appellate courts, in the public interest, may, of their own motion, notice errors to which no exception has been taken, if the errors are obvious, or if they otherwise seriously affect the fairness, integrity, or public reputation of judicial proceedings." See Screws v. United States, supra; Yoffe v. United States, 1 Cir., 1946, 153 F.2d 570, 576 and see also Terminiello v. City of Chicago, 1949, 337 U.S. 1, 69 S.Ct. 894, 93 L.Ed. 1131 wherein the problem is discussed by several members of the Court although in a slightly different setting.

Under this rule we would certainly notice the omission of any reference whatever in the charge to the issue of willfulness. But that is not the situation before us, for that issue was not only stressed in the arguments of counsel on both sides but it was also discussed by the court in its charge. It is true that the court's discussion of the issue might have been more elaborate, but reading the charge as a whole against the background of the evidence and the arguments, we think the court covered the issue fully enough for the jury to understand the importance of the issue. Nor do we think that the probability of confusion in the minds of the jury from what was said is great enough to warrant the inference of a serious miscarriage of...